The Myth of "Wall Street vs. Main Street"

Liberal commentators and politicians have been using populist rhetoric during the current financial crisis for political advantage. In particular they have been complaining about financial bailouts by the federal government for banks, stockbrokers and other large corporations involved with trading on the New York Stock exchange on Wall Street, which are collectively referred to as "Wall Street." In contrast, the liberals' populist argument suggests, the federal government should be helping the "little guy," as Franklin Roosevelt would have put it, who resides proverbially on "Main Street."

Of course, even these liberal commentators recognize that the federal bailouts for these large corporations are not some new form of corporate welfare, intended as a kind of political payoff for the wealthy, but are intended to protect the economy from the failings of businesses, particularly in the financial sector of the economy, that would be especially harmful in terms of drastically reducing the availability of credit for all who seek it.

But my main point is to expose this rhetorical metaphor of "Wall Street vs. Main Street" as phony. First of all, Wall Street is the Main Street, in the sense that it is the financial capital of the world, although Pennsylvania Avenue in Washington, D.C. is increasingly supplanting Wall Street in this regard. The more important reason that the metaphor is phony is because the distinction between Wall Street and "Main Street" is blurring. "Main Street" is represented on Wall Street more so than ever before. As of a few years ago already, a majority of Americans were owners of stock -- a majority! Being a stock-owner is no longer a privilege available for only the wealthy few, for today many Americans own stocks in their employee pension plans, if not as willing investors of significant parts of their financial portfolios.

Liberals cannot have it both ways -- demagoguing "Corporate America" while complaining about how lower class Americans are losing their net worth because of the decline in the value of stocks -- of "Corporate America." They must come to understand that government policies that disincentivize investment, like corporate taxes and capital gains taxes, harm not only businesses, which, in turn, harms the economy, but directly harm lower class Americans, who live on "Main Street," and who are the owners of "Corporate America" -- on Wall Street.